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Tips for Avoiding Fraud

The most common method of detecting fraud and defalcation (embezzlement) is a tip or complaint from an employee, vendor, customer or anonymous informant. Although small business frauds have a relatively low detection rate by audits, this fact does not accurately reflect the effectiveness of audits as deterrents to fraud by putting personnel on notice that fraud is likely to be detected.

The following list of practical fraud prevention tips has been compiled from a variety of sources.

2. Have the monthly bank statement delivered unopened to the owner, who should review it for unusual transactions such as declining deposits and unfamiliar payees.

3. Owners should look for a) signatures or endorsements that look forged, b) missing checks, c) check numbers that are out of order, and d) checks where the payee listed does not match the name in the check register.

4. Consider an independent review of the cash accounts and bank statements by an anti-fraud specialist.

EMPLOYMENT CONDITIONS

5. Institute background checks on new employees, and notify job applicants that their backgrounds will be checked.

6. Employees who receive regular and recurring training about the detrimental aspects of fraud are more likely to aid in controlling it.

7. Employees who feel well-treated and adequately compensated are less likely to commit occupational fraud than those who don’t.

8. Employees who hold grudges against their employers—whether or not justified—are more likely turn to occupational fraud and abuse.

WORKPLACE CONDITIONS

9. Insist that employees take a vacation for at least one week every year and use that time to have the books reviewed for discrepancies.

10. Adopt a tip hotline or complaint-reporting mechanism that will enable employees, vendors, customers, or outside sources to report suspected fraud anonymously or without fear of reprisal.

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"Want more than just tax preparation? I have always told prospective clients that most anyone can provide accounting and tax services from a compliance perspective. Good CPAs provide tax saving strategies and other business insights to increase profitability." --Gene Smith

"Does your business need financial direction? I will help you understand your financial reports and set reasonable expectations, both of which are key to making sound business decisions."

--Keith Frame

"Getting stuck in QuickBooks? I can get you unstuck, and help you learn the software to run your business more effectively."

--Tina Powell

"Tax season got you stressed? I am here to help get you through tax packets and documents, so you can walk away with the weight off of your shoulders."

--Sara Brubaker

"New to accounting or not sure what questions to ask? I understand those anxieties and am happy to answer your questions and put your concerns to rest."

--Anna Philbert

"Perplexed by tax documents? I am here to answer questions and help you understand the forms, packets of information and required payments our CPAs calculate for you."

"Working abroad? You can have confidence in my ability to handle the complexities of working overseas. Know that I am available to answer your questions, even if you live in another state, another time zone or another country."

--Scot Smith

"Is Payroll giving you a headache? I am here to take the confusion out of payroll and make it simple for you."

--Melissa King

"Do you need to know what your business is worth? As a CVA I handle everything from estates to divorce to mergers and acquisitions. Count on me for prompt and professional service."

--Heather Graham

"Too time-consuming to make a trip into our office for help? I can save you time and money by using technology to remotely fix problems or just answer questions."

--Jennifer Wentworth

"Business valuation and litigation support are serious business. I take the time to put myself in your shoes and understand your needs. The best outcome is achieved when your business valuation expert truly understands your situation." --Paul Murray

"Want more than just tax preparation? I have always told prospective clients that most anyone can provide accounting and tax services from a compliance perspective. Good CPAs provide tax saving strategies and other business insights to increase profitability." --Gene Smith

"Does your business need financial direction? I will help you understand your financial reports and set reasonable expectations, both of which are key to making sound business decisions."

--Keith Frame

"Getting stuck in QuickBooks? I can get you unstuck, and help you learn the software to run your business more effectively."

--Tina Powell

"Tax season got you stressed? I am here to help get you through tax packets and documents, so you can walk away with the weight off of your shoulders."

--Sara Brubaker

"New to accounting or not sure what questions to ask? I understand those anxieties and am happy to answer your questions and put your concerns to rest."

--Anna Philbert

"Perplexed by tax documents? I am here to answer questions and help you understand the forms, packets of information and required payments our CPAs calculate for you."